11 June 2024
Quilter’s WealthSelect Managed Portfolio Service has used its latest quarterly rebalance to introduce two new funds to its Sustainable range.
Portfolio managers Stuart Clark, Helen Bradshaw and Bethan Dixon have taken the decision to introduce the Alliance Bernstein Global Sustainable Equity Fund and the Redwheel Life Changing Treatments Fund.
The Alliance Bernstein Global Sustainable Equity Fund was introduced following a search to find a manager to complement the existing holdings within the global multi thematic allocation. Alongside this, the allocation to this part of the portfolio was increased as part of a further defensive shift in the equity mix.
The fund invests in companies that are positively exposed to environmentally or socially orientated sustainable investment themes derived from the UN Sustainable Development Goals such as Health, Climate and Empowerment which includes education and employment, financial security and sustainable infrastructure.
Meanwhile the Redwheel Life Changing Treatments Fund was added to diversify exposure within the dedicated healthcare theme. The fund will complement the existing healthcare holding, the Candriam Oncology Impact Fund. The Redwheel fund invests globally, including in emerging markets and has a sustainable investment objective to support the UN Sustainable Development Goals by investing in companies contributing to good health and well-being. The fund gains this exposure via the proprietary sub themes of Life Changing Drugs, Health System Strengthening and Life Changing Care, with a key focus on prioritising patient outcomes.
The Sustainable range has also been trimming exposure to the energy transition following a tactical increase in September 2023. While the interest rate backdrop has been challenging for the theme, performance has been strong more recently, and so the WealthSelect team has taken the opportunity to trim ahead of key upcoming elections which may create some noise and volatility. However, they remain positive on the long-term structural tailwinds of the energy transition and it remains a key theme in the Sustainable range
Elsewhere in the WealthSelect portfolios, the Managed range continues to see relative value in the UK. Within the UK, there has been a pick-up in merger activity along with more positive economic signs. The portfolios have increased the allocation to the Quilter Investors UK Equity Opportunities Fund, managed by Artemis, given its positioning lower down the market cap spectrum and exposure to more domestically orientated earnings.
Bethan Dixon, portfolio manager at Quilter Investors, said: “The sustainable fund environment continues to evolve and as such new and interesting funds are coming to market that we are interested in. We are very conscious of ensuring we have appropriate diversification in the sustainable range given the tendency for structural biases, so we are excited by the addition of two new funds helping to increase optionality within the manager mix.
“Both funds have strong investment processes and invest in companies at the forefront of sustainable solutions. The Redwheel fund in particular operates in a really interesting space with healthcare becoming increasingly crucial as populations age and pharmaceutical companies take the fight to complex diseases. Both funds will add a new dimension to the sustainable range and we are looking forward to seeing how they perform.
“Meanwhile, as we approach the general election in July, the UK continues to offer intriguing valuation opportunities, especially down the market cap to more domestically focused companies. Rate cuts appear to be on the horizon, and this could result in a catalyst for good performance for the UK at a time when the recession is in the rear-view mirror and economic challenges ease a little.”
